174 RURAL RECONSTRUCTION 



stock bank. That kind of lending is not altogether to the taste of 

 our bic bankers. And to him who cannot a Luzzatti bank, with 

 shares and limited liability, would be a boon. 



For the small man co-operative credit is an absolute necessity 

 if he is to thrive as we wish in this country. 



Much as I love Raiffeisen co-operation, I believe that in this 

 country, where co-operation is pretty generally understood, having 

 been long practised, limited liability banking, being so nearly akin 

 to the co-operation now carried on by our co-operative societies, 

 will commend itself more than unlimited, with all the latter's 

 unquestionable and excellent qualities. The Irish began with 

 unlimited liability banking. It served its purpose well. The War 

 came in to bring further gain to agriculture. Prices went up, and 

 now that they have got up upon firm ground Irish farmers appear 

 more disposed to practise limited liability banking. Indians will 

 scarcely hear of limited liability. They believe in unlimited 

 liability, which they can thoroughly understand, though, oddly 

 perhaps, at the same time they are strongly in favour of having 

 shares. Certainly in India co-operative banking has proved a 

 wonderful success. Introduced only in 1904 — practically not till 

 1905 — co-operative banking is acknowledged to have imparted a 

 new aspect to Indian country life, opening to the dweller in the 

 country a new horizon and giving him the prospect of recovering his 

 cherished village community.* 



For our own small holders — and also not-holders — co-operative 

 credit may, as observed, be pronounced indispensable. They need it 

 to provide working capital for them, and training to business and 

 leading on to other co-operation. We have dawdled too long. It 

 may be argued that before small holdings became a genuinely 

 accepted policy, an institution to be spread out over all the country, 

 the call for co-operative credit was not so urgent. It has become 

 urgent now. And since we have been talking about it so long, and 

 praising it and inquiring into it, obtaining (more than ten years ago) 

 an enthusiastic endorsement of the recommendation to adopt it 

 from a most competent Select Committee of the House of Lords, 

 which the full House readily subscribed to, having the most 

 encouraging example of our great Asiatic dependency before our 

 eyes, and having the unquestionable utility of co-operative banking, 

 attested by a late Prime Minister, Mr. Asquith, let us hope that we 

 shall at length also think seriously about putting it into practice to 

 the benefit of our country as an integral part of rural reconstruction. 



* See my " Co-operation in India." Thackers. 1919. 



